Does Your Company Even Exist?
As a business owner, you’ve done your homework. You have put your blood, sweat and tears into crafting your dream. You’ve registered with (seemingly) every agency you needed. So it may surprise you to find out your business doesn’t officially exist.
Just for grins, try this experiment: Go to the Secretary of State’s website to look up your company’s name.
- In California: https://businesssearch.sos.ca.gov/
- In Colorado: https://www.sos.state.co.us/biz/BusinessEntityCriteriaExt.do
- In Illinois: http://www.ilsos.gov/corporatellc/
- In Florida: http://search.sunbiz.org/Inquiry/CorporationSearch/ByName
- In New Mexico: https://portal.sos.state.nm.us/BFS/online/CorporationBusinessSearch
- In Texas: https://direct.sos.state.tx.us/
For other states, simply search for: “YOUR-STATE corporate search” in Google, Bing or your favorite search engine.
Would it surprise you to learn that over one-half of our clients aren’t listed when we do this search for them?
Here are some aspects to consider in your search:
- First off, did you find your company?
- If so, is it EXACTLY as you thought it was, word for word, with the correct spacing and entity type?
- Is your business type listed correctly? Check that your “Limited Liability Company” (i.e. LLC) is listed as such and so on.
- If your company is listed, is it in “good standing”?
Reasons You May Not Find Your Name
So why aren’t you listed? And why should you care? The most common reasons are listed below:
- No Company Formed. When you are the sole owner and operator of your business, you are (generally) running a sole proprietorship. This is a legitimate business, but the Secretary of State will not know about you. This is the most common reason why a business is not listed. See our blog article entitled, Sole Proprietorships. Take special note that this form of business does not shield you from personal liability. Business debts are your debts. Your company will cease to exist if something happens to you. Period. Friends, family, clients and investors will be left without a business. You are also paying more in taxes than you might otherwise would with a formal company.
- Doing Business As, or DBA. Oftentimes, I find our clients have been “doing business as” another company name for so long, they completely forgot what their real company name is. This can be a real problem for two (2) reasons: First, many states have “fictitious name statutes” on the books, and require you to properly register the name you are”doing business as.” Second, in order to properly take advantage of the liability protection a formal corporation or LLC affords, you must put the public on notice. This means the footer of your website should have “Your Company Name, LLC, d/b/a Your Doing Business As Name” and you should consider that your “legal name” wherever appropriate, including business cards, letterhead, contracts, etc. Failure to do so is a surefire way to shoot oneself in the (metaphorical) foot. If you forgot your company name, the odds are you aren’t properly putting the public at notice by using your legal name when and where appropriate.
- You Simply Forgot. Let’s face it, people forget important things. Whether it be anniversaries, letting the dog out or that one doctor’s appointment you cannot schedule for the life of you, important things slip through the cracks. Interestingly enough, this happens regularly with business names. For whatever reason, the original company name used a clever misspelling or odd spacing that was forgotten over the years. When this happens, you’re actually “Doing Business As” some other name than your original, correct company name. Check the above bullet. This situation can get quite messy because when this happens you are inadvertently removing the liability protection your company affords you.
- You Moved. When you move, you get your mail transferred. Whether its across state lines or just down the block, you need to make sure the Secretary of State is notified. If you forgot, it’s quite possible your corporate entity stopped receiving notices from the Secretary of State’s Office. If this is the case, your company may no longer be in good standing or worse, your corporate charter could have been revoked.
This is a Critical Issue for Your Business
One of the most common ways plaintiff’s lawyers can pierce the corporate veil (and go after your personal assets) is to determine your business is not acting within the shield of a corporation or LLC.
If you found that you fell into the one-half of our clients who cannot find their name in the Secretary of State’s corporate listing, you should strongly consider either incorporating or talking to a business attorney and/or small business lawyer to help you understand the issues and your options. There are many solutions, depending on the reason you’re not listed, including:
- Formally registering a Corporation (i.e. C-Corp or S-Corp) or LLC for your business, if you’re a sole proprietorship.
- Filing a DBA certificate, if required.
- Amending your Articles of Incorporation or Organization, depending on whether you are already a Corporation or LLC.
- Filing a foreign Corporation or LLC, if you’re doing business in another state.
- Bringing your Corporation or LLC into compliance, if you are not in “good standing”.
Remember, no two businesses are alike. Its best to consult an expert who can really understand your business and needs. Contact us to learn more, and to understand what your options may be.